TLDR: Artificial intelligence is profoundly impacting the UK’s hiring landscape, particularly in technology and entry-level roles. Online job postings have seen a 31% overall decline in the three months to May 2025 compared to 2022, with AI-exposed positions experiencing an even sharper 38% drop. This shift is driven by companies anticipating AI-driven productivity gains and broader economic headwinds, leading to a re-evaluation of workforce strategies across various sectors.
The United Kingdom’s job market is undergoing a significant transformation, with artificial intelligence emerging as a primary disruptor, particularly affecting technology and entry-level positions. New data reveals a substantial scaling back of hiring in roles susceptible to AI automation, signaling a broader slowdown in the labor market.
According to a recent analysis by McKinsey & Co., online job postings in the UK plummeted by 31% in the three months leading up to May 2025, when compared to the same period in 2022. The impact is even more pronounced in roles identified as highly exposed to AI, such as software engineering, finance, and consulting, where job listings saw a dramatic 38% decline—nearly double the overall market contraction. Over the past three years, vacancies for positions like software developers, management consultants, and graphic designers have fallen by more than 50%. Roles in mathematics, including data science and analytics, have also been significantly affected, with job postings halving since pre-pandemic levels.
Entry-level opportunities have not been spared from this disruption. Job postings for internships, apprenticeships, and junior positions that do not require degrees have decreased by nearly one-third since late 2022, a period that coincides with the widespread adoption of generative AI tools like ChatGPT. Tasks typically assigned to junior staff, such as summarizing meetings, conducting research, or sifting through documents, are precisely the functions that generative AI can now easily replicate, leading companies to rethink traditional career ladders and entry points.
Tera Allas, a senior adviser at McKinsey, commented on this trend, stating, “The anticipation of significant – albeit uncertain – future productivity gains, especially as the technology and its applications mature, is prompting companies to review their workforce strategies and pause aspects of their recruitment.” This strategic pause is further compounded by existing economic challenges, including high interest rates, sluggish economic growth, and increased labor costs stemming from recent tax changes.
The hiring slowdown extends beyond just AI-sensitive sectors. The broader UK labor market is also showing signs of strain, with permanent job placements in London experiencing their sharpest decline in nearly two years in June. Demand for temporary staff has also decreased. The hospitality industry, for instance, has already shed 69,000 jobs since April, and UKHospitality has warned that up to 200,000 jobs could be lost over the next year if current trends persist.
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Conversely, sectors with limited AI exposure, such as real estate and education, have observed growth in job vacancies. In response to the evolving landscape, the UK government is launching initiatives to adapt. A pioneering Open-Source AI Fellowship, a $1 million program set to begin in January 2026 in collaboration with Meta and the Alan Turing Institute, aims to embed skilled engineers within the public sector to co-create open-source AI tools. UK Technology Secretary Peter Kyle described the program as “AI in action – open, practical, and built for public good,” emphasizing a focus on tangible improvements. Additionally, a parallel agreement with Google Cloud aims to upskill 100,000 civil servants in cloud and AI by 2030, underscoring the nation’s ambition to build sovereign AI capabilities and modernize essential infrastructure systems.
